Related post: The Partnership Continues: Apple iPad Now Available from Third-Party Sellers on Amazon
By Stephen Windwalker
How great is the loyalty of Amazon customers? Apparently in some cases, it's enough to justify paying $100 for a rather popular recently released product from a company that's also reputed to get pretty high marks when it comes to customer loyalty.
When I posted yesterday about the iPad turning up on Amazon, I was a bit skeptical about how many prospective iPad buyers would take such a circuitous and more expensive route to acquisition:
at least for now it's no "Big Deal." The lowest third-party price for the base 16GB wifi model, as I post this note, is about $125 higher than the price at which the same model is available in the Apple Store. Even if you add in $6.49 for shipping and subtract sales tax in a back of the envelope comparison with the price you would pay directly to Apple, you would still be out a hundred bucks or so. Nearly all of the third-party sellers offering iPads at prices between $600 and $1,000 are low-volume or "just launched" sellers, and they may be hoping for some arbitrage profit if Apple happens to run out of iPads.
But the effect of the Apple Store' current delay of "5 to 7 business days" in shipping the iPad is already generating income for Amazon and its third-party sellers. As of this morning, Amazon's bestseller list for tablet computers shows the iPad ranked #2 and #3 among hundreds of worthy competitors. One explanation I hadn't factored in yesterday is the possibility that many Amazon customers not only have easy 1-click payment processes set up there but also maintain gift card balances, gift registries, and similar assets with Amazon. In any case, if you take the two models combined it is entirely possible that the iPad is already Amazon's topselling tablet:
I'm still scratching my head, and it's tough to say how many sales it might take to generate such a lofty perch, but if Amazon and Apple have yet to finalize arrangements for Amazon to sell the iPad directly on the main Amazon website, this might begin to get their attention. Meanwhile, Amazon's share of the profit for each iPad sold by a third-party Amazon Marketplace seller is 15%, minus any affiliate fees or commissions.
That's going to average at least $100 a pop at the prices now listed, which is nothing to sneeze at when you consider that Amazon incurs now warehousing or fulfillment costs for these transactions and, in all likelihood, will also be selling beaucoup Kindle books through the Kindle for iPad App to these Amazon-loyal iPad buyers.
So, I'm just asking here: what's not to like about Jeff Bezos' business model?
Meanwhile, as noted yesterday, the Amazon Store may already be the best place to shop for iPad accessories like these:
Targus Hughes Leather Portfolio Slipcase Designed for 9.7 Inch Apple iPad TES00701US (Brown) (left, $59.99)
Apple Wireless Keyboard - $69 - I've been using one with the iPad for a couple of days and loving it
13-Item Accessories Bundle for Apple iPad Tablet Wifi / 3G skin case, sleeve, earphone, screen protector, crystal case, FM transmitter, speaker, cable + more
Be.ez 100884 LA robe Allure Sleeve for New iPad (Red Kiss) (left, $29.99)
Apple iPad Car Charger (White)
Scratch Defense Neoprene Sleeve for the Apple iPad
Belkin F8N277tt Pleated Sleeve for iPad - Black
Marware Sport Grip Pro for iPad Black/Black (left, $34.99)
Macally MSUITPAD Silicon Protective Case for iPad
Shade Anti-glare Film for iPad
Hard Candy Cases Sleek Skin for Apple iPad - Orange
Marware Eco-Vue for iPad